Back to the Future

“1.21 Gigawatts!

How am I going to be able to generate so much energy? It is impossible”

-Dr. Emmett Brown

Many of you will remember that classic film from 1985: “Back to the Future.” In the movie, Marty McFly convinces Dr. Brown (“The Doc”) that he traveled to the past thanks to a time machine that he built in the future, and that it ran out of battery. Finally, the Doc agrees to help Marty, but he faces a great problem: producing 1.21 Gigawatts (GW) to turn on the DeLorean.

In the mid-1980s, nuclear energy seemed very promising; it was considered the future and the only way to put an end to fossil sources. Many things changed with the Chernobyl accident the following year, but that is another story.

Returning (to the future): it is 2020, they still do not sell plutonium in pharmacies and many things have changed in 35 years. The energy future is no longer deposited in nuclear energy, but in new-generation renewables — particularly solar and wind —, together with storage and hydrogen. That could be the winning combination of the future.

New-generation renewable energies have become the reference point of our present. Their spread is no longer part of a distant future difficult to see on the horizon, nor are their costs restrictive as before. Now they appear the same in homes as in businesses and industries, we can even see how large portions of agricultural lands are beginning to use their spaces to capture the sun.

If the Doc from “Back to the Future” had to generate 1.21 GW to turn on the DeLorean with current technology, could renewable energies in Mexico help him? Let us see.

According to figures from the Secretariat of Energy for the close of 2019, the installed capacity of electric energy in Mexico was 79.60 GW. This includes plants that use fossil sources, such as combined cycle plants that use natural gas, conventional thermal plants and internal combustion plants — which require diesel and fuel oil —; and coal-fired plants that, as their name indicates, use coal.

There is also hydroelectric energy, which uses dams and other bodies of water, and the nuclear energy that CFE operates in Laguna Verde, Veracruz. And, of course, we have solar photovoltaic, wind and geothermal energies.

The installed capacity of photovoltaic solar energy in Mexico represented 4.37% of the total in 2019, that is, a capacity of 3.4 GW. This means that if we used all the solar installations in the country at the same time for a couple of minutes, we could send Marty to the future almost three times. If we add wind energy, we can return him to the future eight times.

So great is Mexico’s renewable potential that on April 19 at noon, solar, wind, hydroelectric and geothermal energies together contributed 33% of the energy that was consumed at that moment. Solar energy alone contributed on average 1.76 Gigawatts every hour of the month, and I am sure that it is only the beginning.

In these times where renewable energies have become a topic of public debate, it is important to return to the future and leave the past behind. We can all design strategies that allow the country to achieve a true energy transition, integrate more renewable energies, reinforce electric networks, decentralize and digitalize consumption.

So, Doc, in the future they do not sell plutonium in pharmacies, but solar panels are very cheap and easy to get.

This article was originally published by Business Insider México.
Date: May 27, 2020
Original Link: https://businessinsider.mx/volver-al-futuro-energias-renovables-mexico-opinion-paul-alejandro-sanchez-energia-circular/

Archived in: https://web.archive.org/web/20200805220639/https://businessinsider.mx/volver-al-futuro-energias-renovables-mexico-opinion-paul-alejandro-sanchez-energia-circular/

2019: Lessons and Opportunities

The first year of a new administration is always characterized by a slowdown in activity. The country’s economic direction changes, government strategies for generating economic development and well-being are reoriented, and the objectives and priorities that will define the public agenda are reconsidered.

For this reason, a necessary pause is required to evaluate what has been done and what has been achieved. This 2019 has been a year of learning for the new administration and of analysis aimed at determining the foundations upon which the desired energy future can be built. The current administration’s vision for the energy sector represents a departure from the framework established by the previous administration, and within this break a series of actions have been undertaken that have profoundly transformed the industry.

1. Pause in Competitive Processes. The new administration has placed the energy sector’s competitive processes on an indefinite hold, particularly oil bidding rounds, farm-outs, and electricity auctions. Following three oil bidding rounds and an equal number of electricity auctions that committed significant investments for the country, the administration decided to review the contracts and the progress made on those commitments. It has repeatedly stated that if private sector commitments in these areas are fulfilled in full, additional competitive processes will be reactivated. Therefore, it will be important to monitor the progress of these projects during 2020.

2. Strengthening PEMEX and CFE. One of the current administration’s promises was to rescue and strengthen the state-owned productive enterprises by improving their financial position, restructuring their liabilities, and restoring their leading role within their respective industries. This year we have witnessed that process unfold. PEMEX is seeking to revive its role in oil exploration and production through service contracts, while CFE aims to install additional generation capacity through the PIDIREGAS model. Both approaches could begin to materialize in 2020.

3. Energy Self-Sufficiency. A fundamental objective of the current administration is to produce domestically everything the country consumes, from electricity to gasoline. This objective explains the proposed construction of the Dos Bocas refinery and efforts to increase crude oil processing through the National Refining System. The challenge is significant. Greater domestic processing implies lower imports and, consequently, lower revenues derived from the country’s export platform.

4. A Different Institutional Design. It can be argued that the current administration proposes a new institutional design based more on informal relationships and cooperation than on hierarchies and controls. Under this approach, the Ministry of Energy is responsible for energy policy and overseeing the construction of Dos Bocas, while the CEO of CFE effectively leads the country’s electricity policy and the CEO of PEMEX leads hydrocarbon production policy. Regulators, for their part, now maintain a closer relationship with the state-owned productive enterprises and the Ministry.

5. Opportunities Remain. It is important to emphasize that opportunities still exist for companies capable of developing innovative business models. Private energy auctions, distributed generation projects aimed at reducing costs and increasing renewable energy consumption, next-generation service stations, and risk analysis and management services are just a few examples.

If 2019 has been a year of reflection, we are confident that 2020 will be a year of action and implementation, focused on turning the opportunities offered by Mexico’s energy sector into reality. We hope that the five topics discussed here will serve as useful considerations for planning the year ahead.

This article was originally published by Petróleo y Energía, Volume 17, Issue 112, November–December 2019.
Date: December, 2019
Original: Printed Edition.
Archived Link: https://issuu.com/revistapetroleoenergia/docs/petrus_122-noviembre-diciembre [Archived]